British dairy company tests out milk contract with guaranteed purchase price

Dairy Crest, a UK dairy foods company, recently decided to apply a fixed milk price for the next two years. Initially planned for this summer, the implementation of the fixed price contract will be moved up to March due to producer’s interest in the scheme. According to the Socopag1 press agency, producers signing this contract are getting an additional 0.29 cent over the company’s standard price of 27.79 cents.

This price is guaranteed for two years. It remains fixed when market fluctuations are below 2.30 cents. Should market prices vary upward or downward by 2.30 cents, the Dairy Crest guaranteed price would reflect the amount above or below the ceiling or bottom price.

While agricultural experts are concerned by the threats of international price volatility on national agricultural activities and are looking into the devices to be implemented, the scheme adopted by the British dairy company is indeed of interest. By providing British dairy farmers with indispensable stability, the Dairy Crest initiative should be monitored as such.


1 France-Europe-Allemagne n°187, http://www.socopag.fr